Sunday, August 5, 2012

Of temples and temple endowment acts

It has started to dawn on some sections of the net chatterati that socialism in India has failed. This realization has started a movement towards endorsing free market reforms. Much of this is welcome, but some of it is travelling too far into libertarianism. This causes some problems.* For instance, it is widely known that the goal of libertarianism is dismantling the welfare state. To a question that who will look after the poor after the welfare state is dismantled, one 'secular' libertarian friend suggested that it is our responsibility to take care of them.
This is a very romantic and very appreciable thought, and it also has MILTON FRIEDMAN written all over it*. In the west which gets ample of skilled labor from around the world, this might click. But in India, there is a serious dearth of talented professionals and innovative people in many fields. These are the people who are most vulnerable to long periods of exposure on libertarian forums and believing in a minimalist state. We need these people to work hard and make profits for their companies and drive the nation into the new age. Now if these people go on to do charity without burning their potential, it will be a tragedy to the nation. There is also the problem of how far these individuals will reach on their own, because there's simply so much to do. We will therefore not have to stop on that part of libertarianism associated with individual charities and examine another long forgotten element of the society to do charity and public service - your neighborhood temple.

I will try to encapsulate the message of this booklet (ref) and this paper (ref) about what Hindu temples were able to do earlier and can do so again today:

1) Educate people about concepts of Hindu dharma and the threats facing it.
2) Be service oriented and do charity and public work in the neighboring area.
3) Initiate inter-faith dialogs with Abrahamic faiths.
4) Build irrigation facilities for neighboring villages.
5) Invest in enhancing productivity for places from which endowments are sourced (which was the concept behind point 4.
6) Run educational institutions (mathas).
7) Support musicians (probably related to aarti sessions) and scholars (do research?)
8) Support pilgrimage housing.
9) And do maintenance of the building.

It thus was able to serve as an independent business and probably operated like a big private company today. With regards to south Indian temple activities, these were enabled by assigning village grants to temple and the temple would then collect 51 to 75% of the village income. We might not be able to implement that kind of stuff, but we can at least allow for voluntary donations to the temple. However, except for a small part of point 9 of the above, today's temples can't do any of the above activities. The reason: endowment acts.

These acts are actually a continuation of British policy (ref) towards interference in temple affairs. Through endowment acts, the government enters into the management of hindu religious institutions using the argument that funds available to these are mismanaged. This is viewed so because each temple manages its funds differently. The scope creep of endowment acts is progressively getting worse. However, this might not be constitutional since according to article 26 every religious denomination is allowed:

1) to establish and maintain institutions for religious and charitable purposes.
2) to manage its own affairs in matters of religion.
3) to own and acquire movable and immovable property.
4) to administer such property in accordance with law.

Clause 2 and 4 should be sufficient to allow for an argument of the financial freedom of temples. The temples have started their own agitation for this, as in the Tirupathi declaration. The thing about endowment acts that nobody seems to ask is why is not the same argument (about government control being better than local control and the constitutionality premise of it) being forwarded for other religious places? The financial and operational freedom of Hindu temples can start the long process of recovery of Hindu traditions that have been suppressed since the past millennium.  There are several projects that await execution by temples, including writing a smriti for this age*. Financial freedom to temples would also allow them to compete with the Abrahamic faiths in public service. Unwinding the welfare state to some extent is also assured, as temples have the profit incentive for public service in furthering the cause of Hinduism while government run welfare schemes are known to operate badly for the lack of it.* And as Sun Tzu would say, a general should put his men in a tough spot, that is where they will fight the hardest. Our hindu priests are in a tough spot, and from here, there is nowhere to retreat. We can help them by campaigning to dismantle the endowment acts. 

* = edited later to improve flow of logic.

Saturday, July 28, 2012

Hindu Economics: More brass-tacks

In a previous post (click), I had proposed that think tanks for the Hindu right should work on a Hindu field of economics. The reasoning behind the proposal was that if it is anybody in the Hindu fold that doesn't take for granted what the West designs for its society, it would be the Hindu right. To build on this, the book on Hindu Economics by M.G. Bokare might be useful. Mr. Bokare has done a yeoman's service to the Hindu cause by giving some basic principles on economics after delving into the Vedas, the epics, Shukraniti, Viduraniti and the Arthashastra by Kautilya.

So let's start with the basic definitions. We will use a not yet outdated and at the same time easily understandable and less controversial definition for economics as was given by Alfred Marshall: 

"Economics is a study of man in the ordinary business of life. It enquires how he gets his income and how he uses it. Thus it is on the one side, the study of wealth and on the other and more important side, a part of the study of man."

Quoting this paper (ref), Hindu economics in the past has been proposed to have a similar definition:

"The objective of Hindu economics is to guide individuals to lead a meaningful satisfying life complete with all resources in abundance." 

(Barring the focus on money, this is similar to how economics is being defined in that it seeks to find a perfect distribution of resources to needs, and maybe it was apt for its time because money was not the centre of all activity in earlier times.)

Now let's talk about money making. There are three major ways, (not including a zeroth way) which in the order of outcomes in terms of income security are as follows:

0) The zeroth way of money making is soaking up government welfare. A brilliant indictment of one such scheme can be found here (click). I have numbered this type as zero because of the outcome, which is that such schemes lead to no productivity and this method of earning money ends as soon as the government runs out of other people's money. Besides, productivity lost due to badly prepared schemes make government tax revenues fall and thus "other people's money" runs out faster. 

1) The first important method of money making is based on skill development. Suppose a person X is to get vocational training for a certain skill, and labor endlessly at a set wage till kingdom come, live within his means and be satisfied with it. The risk is that some Y who can do the same thing as X might come up in the same job who is willing to work for less. Or let's say that Y belongs to a country that doesn't even have a minimum wage law like X's country and it is easier to set up shop there. Then, the risk is that X will lose his job to Y. We thus see that basing wealth generation on mere skills is a risky proposition and sooner or later, we'll be left dry. 

2) The second is resource extraction and sales. Suppose a country X has a large population of salmon in its water bodies, a large reserve of oil below its soil and so on. A simple way is to exploit these resources to the hilt and build the economy on that. However, sooner or later these resources will run out and so basing the country on resource generation as a wealth source might be more secure than basing it on skills, but in the long run it is also not a good proposal.

3) A more secure way of money making is that the person X in case 1 mentioned above gets genuinely interested to make a change in his living conditions, reads up more in his field, trains more in his spare time and comes up with a brilliant idea/invention that can make him more productive and can give his employer huge profits. That is how he eventually turns out to be different than Y and his employer would be pleased with him even though Y provides cheap labour. This is the way of success that rich countries promote. An economist who wants to design a good economic system must recognize this importance of innovations and bring out concepts in economic policies that promote or make a case for innovativeness. 

It is upto future Hindu economists and associated think tanks to decide what path of the above 3 (or a combination of two or more paths) they wish to take but my earnest desire would be that they take path 3.  It is impossible that India had the biggest economy in the world until the British arrived without a model for innovation and Hindu economics must be geared towards finding remnant pieces of this innovation model along with incorporating some western practices (credit for this idea goes to Rajeev Malhotra's yahoo discussion forum on breaking india). Taking M.G. Bokare's tome on Hindu economics and other papers by prominent current Hindu historians, we will now see what concepts of his Hindu economics promote innovation. The ultimate efficacy of Hindu economics will be in how it manages to outperform the western capitalist systems in the race of developing new science and technology. 

The basic principles that Bokareji sets out with are:

1)  Doctrine of Abundance (proposed in the Vedas)

2) Doctrine of self employment (proposed by Vidura)

3) Principle of competition (proposed by Shukracharya and Kautilya)

4) Principle of pricing (proposed by Shukracharya and Kautilya)

5) Principle of taxation. (proposed in Shanti Parva)

Much of this is similar to the free market system promoted by libertarians*. The doctrine of abundance is similar to the argument made in the west for more efficiency (i.e. a larger output from the same input). A more efficient system would have a higher production and hence provide for abundance. Self employment provides for an argument for capital intensive investments in R & D to promote production, reduce labor requirements, have higher wages and ultimately provide for laborers to go it alone in their economic life. Competition too provides for scientific progress when one company is trying to beat another at a certain activity, thus resulting in either better quality goods or services. It also requires a deregulated* system with minimum interference of the state to allow participation in a certain activity by smaller players. The principle of pricing suggests that with abundance and competition, it will always tend towards going lower.  Taxation in the Vedic era was low (at max, the Manu Smriti mentions it as 1/6th of income), thus allowing for significant accumulation of capital in the hands of entrepreneurs and giving them room for investing in research and development. We might thus have answered a question raised in an earlier post: that the Indian economic system was similar to a capitalist system but of the austrian school of economics. A break in the education system as proposed earlier could have caused a bend in the development of Indian economics and caused it to veer off onto a socialist trajectory. The utility of a study in the Hindu economics will lie in convincing at least the Hindu right to get off socialist or even Keynesian economics.

Somewhere along the lines of increasing tech development, Bokare has a problem with people going unemployed due to tech improvements in companies and the resultant reduction in requirement of manual labor. But this affection for getting people employed contradicts with his preference for self employment. If people don't get unemployed from existing jobs, how do they make out alone? Hindu economics will need an answer to this in the future. Another weakness of Bokare's economics lies in his opposition to large companies and an appetite for 'small is beautiful', but justification for this* is not provided in his work. There is a contradiction here as well, if large companies are hated, one means of establishing abundance, low costs and a source of tech development will be quenched. Hindu economics of the future should support a model where both large and small companies can exist mutually in a certain field.

In addition, some new practices to Hindu economics might be added. Previous iterations of Hindu economics have asked for interest free banking (ref) and so does Bokare. The necessities of interests in banking have been elucidated by Bastiat before in one his books (ref). While this debate might continue, we clearly see that there is a need for low cost capital. A compromise solution can be proposed here to allow community banks with low interest to operate. One such example is the foundation of sakhi mandals in Gujarat where women folk of families are prompted to save money and lend to anybody they know at low interests. Alternatively, this power can also be trusted to caste based orgs for loaning money out to their members. With local generation of capital, local problems in the trade might also be solved with local innovations, and this will give the Indian penchant of Jugaad some institutional support along with supporting research projects for local needs.

Another recurring theme that keeps featuring in Bokare's book is that Hindu culture promotes not the rape of nature as the west does but milking it. While the veracity of this claim against the west can be questioned, there is something that we should not miss. The traditional way of protecting mother nature for some time has been to simply block the consumption of some natural resources through use of force by building sanctuaries, national parks, etc. This results in displacement of people from the vicinity of such natural resources while needing a massive drain of resources to allow protection. At the same time, the need for the resource is not quenched, encourages illegal poaching and if the people displaced are not absorbable into the local economy, it leads to unemployment and poverty. This might be resolved by local management of natural resources. Adoption of these principles are already yielding success. Hindu economics can very well absorb this practice into its fold. Kautilya's Arthashastra has hints of a similar practice when he writes about maintaining special elephant forests to supply large numbers of elephants for the elephantry in the Mauryan army. 

A more complete reading of Bokare's book is still needed and probably I might discover more contradictions in Bokare's thoughts, propose solutions for them and review the book in the future. As for the field of Hindu economics, a new book by Subramanian Swamy is set for publishing this year, which seems to be promising for the field considering his expertise in both Hindu history and economics.

* = edited later to improve the flow of logic.

Friday, July 20, 2012

Aurobindo on Mahatma Gandhi's non violence

I generally don't like to do posts of these types, but I just couldn't resist myself this time.

source: (click) hat-tip @projectdharma on twitter

“Many educated Indians consider Gandhi a spiritual man. Yes, because the Europeans call him spiritual. But what he preaches is not Indian spirituality but something derived from Russian Christianity,non-violence, suffering, etc. The gospel of suffering that he is preaching has its root in Russia as nowhere else in Europe—other Christian nations don"t believe in it.”
“Purification can come by the transformation of the impulse of violence. In that respect the old system in India was much better: the man who had the fighting spirit became the Kshatriya and then the fighting spirit was raised above the ordinary vital influence. The attempt was to spiritualize it. It succeeded in doing what passive resistance cannot and will not achieve. The Kshatriya was the man who would not allow any oppression, who would fight it out and he was the man who would not oppress anybody. That was the ideal. Gandhi"s position is that he does not care to remove violence from others; he wants to observe non-violence himself.”

P.S.: We will hopefully see more of the above mentioned Kshatriya spirit when I read some books on my reading list on it (War in Ancient India, The wrestler's body: Identity and ideology in North India (which you can find in the link list under books in the right hand side bar of the blog) and a book on Vajramushti). Regular programming on Hindu economics needs more reading and will return next week.

Friday, July 13, 2012

Think tanking: What the Hindu right can do.

The article in the link (click) is one I found during regular Twitter forays on how Indian think tankers can learn from the development of the Prussian General Staff. Below is a paraphrase of what the authors are saying.

The authors of the article justify learning from the Prussians on two counts:
1) From the early stage of both the entities, both Prussia and India were and have been surrounded by existentialist threats from belligerent nations and they have to survive with a combination of military power and diplomacy. 
2) Both Prussia and India had and have a task to fulfill of developing an idea of nationhood among diverse peoples.
The article then goes on to describe the problems facing the ideas industry in India. According to a report they cite, India comes 3rd in terms of number of think tanks, but none of India's think tanks feature in the top 75 of the world and only one features in the top 5 think tanks of Asia, coming in at the 3rd place.

The major issue that Indian think tanks face is the lack of funding (of which there are 3 types: academic, contract and advocacy). India has a few contract funded think tanks (supported by government or private sector). This is due to the fact that our think tanks are centered on political and military affairs in which few in the corporate sector would have any interest. Most of the funding for our think tanks comes from foreign sources, which has the danger of getting a foreign agenda implanted in Indian policy recommendations. If however Indian think tanks go exclusivist, they will lose the foreign funding. Thus, we have a catch-22 situation.
The other issue is a questionable degree of autonomy. Each of India's armed forces has its own think tank. Although these are fed by civilian scholars, it's autonomy has been questioned just on the basis of its affiliation. The last issue is the lack of data and Indian think tanks have found it difficult to access relevant data. This allows career bureaucrats to remain central to policy-making and gives a cover in case of mistakes. Even if Indian think tanks are consulted, they would fail to provide sound advice in the absence of good data.
What to learn from the Prussian general staff:
The article then goes on to outline what Indians can learn from the Prussian general staff. A major strength of them was to recruit a small amount of brilliant analytical cadre which would be rotated among think tanks to give them the widest possible audience. This allowed the Prussian general staff to be the envy of world's armies for the next two centuries.
The general staff was divided into two parts, the great general staff and the field forces general staff. The great general staff at Berlin had the best and brightest of officers in the army vetted through a rigorous talent selection process and were trained to have a spartan work ethic and a secretive life. Retirees of this were sent to the field forces general staff to spread their ideas and implement them. The number of people employed at the general staff was at the most a little over a 100 people.
To summarize, the things to learn from them are as follows:
1) Small is better. - It always employed very few people for instance during the Franco Prussian war of 1870-71, the Prussian army had 16 officers and 119 people of other ranks.
2) To innovate, you need to be multidisciplinary - the general staff also tasked itself into learning about other fields, like civilian administration, diplomatic procedures, etc.
3) Think tanks work better away from public glare.

4) To spread ideas, employ a revolving door recruiting policy rather than webpage hits and media blurbs.
5) Release policy reports to an elite group of policy makers and not to just anybody. (We might have some issues with this, in monarchial Prussia it was pulled off easily.)

Consider that the project of having a central headquarters and regional quarters for the think tank is taken up by a prominent hindu volunteering organization and some of the above mentioned management issues, talent searches, etc. are implemented. The question that arises then and which is relevant to our blog is: "Can any hindu philosophy be the foundation of a think tank?" As the author of the article suggests, one of the ways think tanks can be funded is through contract funding. This is done by and large through corporate sources. For this to be necessary, the author suggests that think tanks need to focus on geo-economics. This field is defined as:

"Broadly, geoeconomics (sometimes geoeconomics) is the study of the spatial, temporal and political aspects of economies and resources." (ref)

However for a think tank affiliated to the Hindu right, there is an all new field called Hindu economics that hasn't been touched yet by many. The linked article provided mentions that this should be based on the concept of Trivarg (three reasons for action ) namely - Dharma, Artha and Kaama while also looking for inappropriate grounds for action such as anger, greed, delusion, pride, revenge, jealousy and hatred. Hindu economics is suggested to be normative whereas 20th century economics has been defined to be descriptive. What this does is that it releases the pressure from economics to study the individual as an entity that behaves in a programmed fashion. On the bright side, it promises to observe human relations and actions in a holistic perspective, aiming perhaps to look beyond the profit motive for human action that current economics endorses and improve the person and the society qualitatively.  On the down side, it suffers from some hair splitting against capitalist systems while not realizing that they are in fact very close to each other (both agree to private ownership of factors of production and free markets). The theory also sounds of as having a tendency to turn gradually into a full blown welfare state, of which we have seen some downsides before. But as a whole, it is a pretty nascent field and changes in basic doctrines and definitions will keep happening if think tanks take it up and hammer out issues.

The one thing that Hindu economics would desperately need is an elementary reason for innovation. Previous iterations of this have not fared well in this regard and appear to promote more of a status quo society. This is clearly out of place in our times where most countries value not labor, but innovations as an engine for the economy. If Hindu economics has to be funded by corporates, it must provide them with innovations in return. The Trivarg mentioned above can very well be elementary reasons for innovation in themselves. Self defense is also something that must be included as an inspiration for innovation. Jugaad as a concept might also be helpful, although it cannot fare as well as a thorough R&D project. In addition, creative destruction is an idea that Hindu economics should not consider sacrilege, it after all is not very different from the idea of Shiva (the secret might lie in being prepared for the redistribution of labour after creative destruction has been put into action). 

Once Hindu economics is perfected at home, it will be very interesting to see its implementation in geoeconomics. Giving locals of other places a good value for their money and respecting their local heritage is something that anybody can do. But transforming their lives through a unique economic model is something that should be the holy grail of Hindu economics and of Indian think tankers.

Sunday, June 17, 2012

The importance of winning the social service narrative

Hindu volunteering organizations worldwide that focus tremendously on social service at the cost of their acceptability to the MSM or the intelligentsia of the day often receive a lot of flak from their supporters for neglecting these aspects. I myself have been guilty of giving them flak at times. Image issues are of course very important in our information age, the harder you blow your trumpet the better it is heard and it helps in keeping the flock numbers high and spirited. However, volunteer organizations have tremendous load on their hands to finish their social assignments, and if some of them believe that these assignments constitute all that they have to do, they shouldn't be harmed by constant harping about their shortcomings. My suggestion would be that they should be joined by their well wishers and changed internally by penetrating their leadership ranks. Another option is to rigorously convince organization chieftains of the good their well wishers could do and see how much they could bend their rules. 

To make my case more convincing, we will look at a less noticed feature of Monotheism's rise among Pagan cultures. It would be absurd to say that Monotheism as an ideology could have won in a straight battle of ideas with pre-existing cultures that had generated spectacular scientific and military achievements and long standing world superpowers. Right from the rise of monotheism to the fall of the Roman empire, there must have been several intellectual discourses between monotheism and paganism. Some monumental works of these types belong to people like the last pagan emperor Julian along with Celsus, Libanius, Porphyry. To know about whatever exists of their works, I will suggest this book: click. Most of it are fragments of the quotes from their works in which they had intellectually challenged both Christianity and Judaism. The fact that these quotes had to be resurrected from the books written by Christians to refute them and that large bodies of these works are lost seem to suggest more than what meets the eye. But something else was happening in the background of these intellectual showdowns that were happening all across the pagan world. Long before Pagans lost the spine to  participate in armed rebellion when their cherished temples and institutions were being plundered and ravaged (refer Libanius's oration to Theodosius in the appendix of the book), it appears to me that another important aspect of the pagan counter offensive against monotheist forces was missing, as we can see from the quotes below:

"Goatherds and shepherds among the Jews following Moses as their leader, and being allured by rustic deceptions, conceived that there is one God." Celsus

"Jesus having collected as his associates 10 or 11 infamous men, consisting of the most wicked publicans and sailors fled into different places, obtaining food with difficulty and in a disgraceful manner." Celsus

"We may see in the forum infamous characters and jugglers collected together who dare not show their tricks to intelligent men but when they perceive a lad and a crowd of slaves and stupid men, they endeavour to ingratiate themselves with such characters as these." Celsus

"We also may see in their own houses, wool weavers, shoemakers, fullers and the most illiterate and rustic men, who dare not say anything in the presence of more elderly and wiser fathers and families; but when they meet with children apart from their parents, and certain stupid women with them, then they discuss something of a wonderful nature; such as that it is not proper to pay attention to parents and preceptors, but that they should be persuaded by them...." Celsus

"The Christians now wonder that the city has been for so many years attacked by disease, the advent of Esculapius and the other gods no longer existing. For Jesus being now reverenced and worshiped, no one any longer derives any public benefit from the gods." Porphyry

"..They likewise suggested to him that the ancestors of the Jews were driven out of Egypt as impious and hateful to the Gods. For their bodies being overspread and infected with the itch and leprosy, they brought them together into one place by way of expiation, and as profane and wicked wretches expelled them from their costs..." Diodorus Sicilus

"After this, Amenophis returned from Ethiopia with a great force, and Rammeses also his son with other forces and encountering the shepherds and defiled people, they defeated and slew multitudes of them, and pursued them to the bounds of Syria." Manethos

"... The scum and refuse of other nations, renouncing the religion of their country, flocked in crowds to Jerusalem, enriching the place with gifts and offerings..." Tacitus

From these quotes, something seems to come out, that the social outreach apparatus of the Pagan empires of the past was either not present, had failed miserably or was not sufficient at the time these new religions arose. A schism seemed to have happened in the socio economic structure of the day and from that schism arose the monster of vengeance that took down mighty empires and civilizations in its wake. No amount of good posturing among the new members of Monotheism was able to stop Paganism from being taken over.   The final death blow was of course provided by Monotheism corrupting the ruling class, infiltrating the army and outright banning of the Pagan religious practices (for that, read this book). This is not to suggest that there should be no attempt at a battle of ideas, or an intellectual posturing but that  is only an accessory to the battle gear that a faith should wear, with its true armaments being social outreach to the poor and needy.

The above should be a lesson to all standing cultures, that whatever be their state of development, their existence is dependent upon the state of existence of the underclass and without taking them forward, their future is under peril as well. If the volunteering organizations are aiding the underclass, uniting the society and trying to prevent subversion, they should thus be at the least left alone at their task and at the most be assisted at it. In my view, if Hindu culture is standing today, it is because of a long standing tradition of service (ref Ch. 17, 18 of the BG and the four debts of life). But this tradition is under tremendous strain from big pockets across the globe. Time is short and to keep the society united under Hinduism, it must be known that the elite in Hinduism cares for its underclass. I call this struggle the struggle for the social service narrative and looking at the outcome of Pagans losing their narrative of social service, it must be won at any cost. 

Thursday, June 14, 2012

Is the welfare state moral or immoral?

In the previous post, we questioned whether capitalism was moral or immoral and what I wanted to express there was that while it has no moral values of its own, it can be supportive of existing moral values and maybe reinforce them by connecting moral values to a profit motive. In this post, we will examine the competitor for capitalism, which in today's age is by and large the welfare state.

Before, we go into analyzing welfarism, let us understand the needs of a man. These can be broadly classified into two groups: 1) material and 2) spiritual. The material needs are food, clothing and shelter. Lately, a few more items have been added to it - like electricity, education, jobs, internet and so on. The spiritual need basically revolves around generating his outlook of life, and some say the need to realize the self. The latter is indeed the Upanishadic goal, most Upanishads focus on educating us about the need of inquiring who we are.

Now, let us analyze welfarism. On the face of it, there seems to have a feel good thing about it. As we saw in the last post, markets redistribute wealth according to people's ability to satisfy others. In this redistribution, some people are left poor. And being poor, they need help. And they expect the government to help. But the government doesn't have any money of its own (let's neglect PSUs for our simple case study), so it taxes and spends on the poor.

And in democracies, this is not unexpected. When the government is defined as by the people, of the people, and for the people, the government is expected to help the people, and one method is to indulge in entitlements. But should the government just handout money to the poor and expect all to get well? Should the government give them food, clothing and shelter and expect all to get well? It is impossible that any government continue to keep managing basic needs of the people for all eternity. Firstly, this happens at a continuous drain of money from the economy through taxation. If the people are just pushed a notch up the socio-economic ladder without any development of their personhood, their expectations of the government keep growing and they vote in increasingly more government spending to satisfy even the most basic of their needs. This raises the first issue of the welfare state, which we shall call for the moment the vote pump. 

Next is the need of money to fund all the welfare. No amount of taxation is actually able to satisfy this vast need of money. In the end, it all boils down to robbing Peter to pay Paul which is a crime all of us can understand. We have to realize that we are in a very connected global system of nations where one company on being taxed more can easily switch to a more agreeable locale with lesser taxes, provided it gets all the conditions it needs for successfully running its business (if you are not clear with this, look up the 'going galt' phenomenon). After a certain number of talented professionals and companies have gone galt, tax revenues of the country start falling. But the amount to be spent remains the same! So the country would start borrowing money and run heavily into debt. This would involve a long and elaborate procedure of coming out of debt spirals, (use this: click as a primer)

But let us not get too much into the details. Welfarism as we have seen thus far, has grave issues, not only does it only satisfy the material needs of men, it also has other issues associated with it as discussed above. Few have been able to satisfy them. However, people expect help from their government, so if welfarism is evil, how should the government go about it? A simple story that many of us learnt during school days, is that it is better to teach a man to fish rather than giving him a fish everyday. If government wants to help people's lives, it should be towards this goal - making people independent in life. With skills, and with jobs resulting from those skills, people must be able to make out on their own and perhaps satisfactorily answer questions about their existence. Maybe, the government helps in people's material needs too, but that should be for a limited span of time, tied to the above mentioned skill development program and not to make them permanently dependent on it. Essentially, the argument for welfare should be that you can withdraw from the common pool of money only if you are going to pay back into it at a later day through taxes on your newly earned job. Only this sort of welfarism, in my view, is moral. 

Saturday, June 9, 2012

Is capitalism moral or immoral?

A lot of Indians have some compunctions with capitalism. Because of the ancient Indian ideal of a minimalist lifestyle and sacrifice at some age in life, many are of the view that an interest in monetary profits is bad. A lopsided reading of the scriptures might have had the appeal to make communism and then socialism popular in India during the period of British occupation and later. As compared to them, capitalism has taken a backseat in popular understanding of Indians. 

But if we are to consider the four purushaarthas of Hindu Dharma, (i.e. Dharma, Artha, Kaama and Moksha), the presence of the second purushaartha Artha (money/economics) implies that ancient Indians had never completely given up on money making. Indeed the ideal was to gain money through means of Dharma, i.e. through righteous means. And capitalism can do nothing to hamper that if the society has been already conditioned to be righteous. A basic definition suggests that it is all about private ownership of means of production, and creation of goods and services for profit by private owned enterprises. The profit motive is essential to encourage a player in the market to perform well and when it is rewarded, it is an incentive for good behavior. For our case in this post, we will take free markets as a synonym for capitalism. 

For a pretty basic understanding of some economic ideas, I suggest you read this book. It begins with some essays by Bastiat busting some myths on free markets. Towards the end, there is a section where twenty criticisms of free markets are addressed by Tom Palmer. He starts off addressing the ethical criticism of free markets. For the sake of brevity in our post, we will consider only a few points that largely relate to ethical criticisms:

1) Markets are immoral or amoral: Here the author mentions that markets make people think of advantages, for which people enter into an exchange. The exchange is usually of the type where a product or service is exchanged for money. To enter an exchange, a person has to respect the rightful claims of other people, and they are constrained by morality and law from simply taking stuff they want. To me, this aspect of markets endorse already existing moral sentiments, unless your moral sentiments included taking stuff. Not respecting other people's sentiments would break exchanges, and I am sure people will have no issues dumping the moral offender.

2) Markets promote greed and selfishness: The myth here is that people are trying to find the lowest prices or make the highest profits, ergo markets make the people greedy and selfish. But the truth is, they don't bar people willing to make small profits or people willing to shell out more from entering the exchanges mentioned in the first point. It is more of a system which accomodates all types of people. Moreover, if wealth is generated by being greedy and selfish, it also allows for its distribution as charity, which many would agree is the epitome of selfless life. Wealth created and distributed this way is far more efficient at running the society than brutal tax and spend schemes which generally are means of wealth destruction.

3) Reliance on Markets leads to monopoly: The myth here is that free markets would eventually lead to few big firms selling everything. But monopoly is what a government gives to select groups of people to deliver products and services. Free markets rest on the principle that anybody can enter the market, exit the market, buy from whomever, and sell to whoever. If in the end game of providing a product/service, one company emerges a winner then it has been through a process of selection, and it would have the best possible stuff of that category, so what is wrong if it has a "monopoly"? If after acquiring "monopoly" it starts downgrading its quality, a competitor will definitely rise from scratch and people would dump the behemoth company in due course of time. If the goods produced by the company are highly profitable, there will surely be more people aspiring to live the life of its owner and again somebody with an imagination will rise to compete with the behemoth. Thus, in my view, such a "monopoly" would not last for long.

4) Markets lead to more inequality than non market processes: Here, it is often considered that markets reward ability to satisfy consumer preferences and a person who is more able is rewarded more than the other. However, a 2006 Economic freedom of the World report suggested that this is not true, that reliance on free markets has a weak correlation with income inequality. Moreover, it substantially raises the income of the poor, and who would dislike that. Also, even if there is an inequality, there is nothing the market can do to keep a person dirt poor, or keep a person filthy rich. A person's outcome in life depends on what he does, and it is always in a state of constant flux. 'Jaisi karni waise bharni', as the proverb goes.

5) Markets cannot meet basic human needs: People like to think that basic needs have to be distributed according to need and not ability to pay, and markets support the latter. However, people living under markets enjoy higher standards of living than people under socialism, so it might be considered that markets do indeed support needs well. It's just that the means to support the needs are not through wealth redistribution, but through wealth generation. By endorsing people's ability to generate wealth, markets allow people to get wealthier, and through that way, they end up supporting their needs too.

We thus see that markets have nothing that impact moral nature of the person. What wires the moral nature of the person is not free markets or capitalism, but a sounder education. After a sound moral nature is established, markets will only support existing moral values and make them stronger. In fact, wealth generation through free markets worldwide has allowed people to have more free time, and greater curiosity to seek out other views of life. Many of them stumble upon scriptures of Hinduism, and reading them, absorb at least some ideas of Hinduism and some have even converted to it. If there is any bigger ally of Hinduism, it is capitalism. Were the ancients aware of the advantages of free markets? Would they have implemented them after establishing independence from foreign powers? I don't know for sure yet, but India's experiments with socialism/communism begin with the first contacts with communist internationals established in 1871 by West Bengal communists. By then, Thomas Babington Macaulay was long gone from the face of the earth.

Updated 6/14/2012: There is a part 2 of this post here: click.

Wednesday, March 7, 2012

The future of governance is here.

---- Originally sent to be posted on CRI  -----

In “the discourses”, Machiavelli had written a passage on the religion of the Romans. He compared two great Roman rulers: Romulus, who was one of its founders and a later day ruler Numa. And then he says that if one were to question who of these were a greater ruler, then he would pick Numa because he was responsible for introducing religion into Rome. Through the introduction of religion, Numa could introduce unconventional laws into Rome which would otherwise have been difficult to convince. Many of these laws would go on to make Rome a great state. But the most important advantage of the Roman religion that Machiavelli suggested was that it inspired a sense of self-governance among the people. And because of this self-governance introduced by religion, the state continues to function inspite of its good rulers passing away.

Self-governance is also a goal held in high esteem in Hindu history. Every living entity in Hindu culture is meant to have a svabhaav (self-character), and a svadharma (self-duty), the latter also including the concept of self-governance. If Narendra Modi is to be judged by any, his performance in engendering this feeling by the people should not be ignored, and that is turning into a focus for most of his next generation reforms. To be taken seriously by the people on this idea, he first needed to prove himself as their benefactor, and this was performed and is continuing to be performed by speedy execution of big ticket projects under Modi. Other factors needed are good quality education, self-initiatives from the people and decentralization of governance, and this is where Modi’s reforms are heading. I would make a quick review of some of these items below which are hoped to change the face of governance in Gujarat in the near future.

In the iCreate scheme for instance, a college like campus is shaping up at Mahatma Mandir in Gandhinagar. It is meant to support individuals with high entrepreneurial potential towards executing entrepreneurial ideas. The scheme covers wide varying fields such as information technology, electronics, biotechnology, nanotechnology, robotics, non-conventional green energy, bio-medical equipment & devices and agro and food processing. If this scheme goes operational, Gujarat would hatch start-ups in all these areas. An obvious spin-off of this scheme that I see would be that the experts hired at iCreate can also be used to impart research ideas at Gujarat’s universities and perform scientific research in the above mentioned fields. But the takeaway message from this scheme that we should remember is that it is meant to engender self-initiative in fields India is lagging far behind than other developed nations.

“Sakhi Mandals” are another such scheme endorsing self-initiative. Each Sakhi Mandal is a group of 15 – 50 women, which are tasked to save up money from their monthly budgets and build up reserves. Amounts from these are loaned to people in need at low interests. The government too steps to pitch in with its contributions to these reserves if they are managed well for a period of 6 months. Usually, these amounts are made use of to run small businesses. The net worth of these businesses has now reached 5000 crores which started from just scratch. I take the success of this scheme as a state endorsement of self-employment and a growing public awareness of the benefits of fiscal responsibility.

Another case where people power has been deployed and which has reaped results is the check dam building initiative. With rural initiative and government funding, 650 thousand checkdams have been built in the past 7 years along with several other smaller improvisations the purpose of which is to obstruct water flow and allow greater ground water percolation. This initiative has allowed Gujarat to be the only state in India where ground water levels have started rising. Modi has taken a similar model for girl child education such as the Kanya Kelavani program. Along with other state employees, he himself goes to select houses in villages and convinces parents to send their girls to schools, which has ensured that school drop-out rates for girls is reduced significantly (to < 10%) from std. 1 to 7. And while the centre’s idea for allowing access to college education to tribals would have been more quotas, Modi’s move was to increase the number of science stream schools as well as engineering and medical colleges in the tribal regions. As a result, the number of seats for engineering colleges has jumped from 13,000 from the time he came to power to 90,000 at the moment.

Modi has deployed a similar scheme based on self-governance for improving the sex ratio in Gujarat, which currently stands at a lowly 1000:900. He goes to communities which has the severest of problems (such as the Kadva Patidar community) and has been convincing people to stop the practice of sex selective abortion. For malnutrition too, a similar solution has been deployed, the CM has taken up a task in his trips across the state to convince people to make arrangements for donating some milk from their daily use for the poor and to the pregnant (for the latter so as to avoid miscarriages out of malnutrition). In comparison to this, our PM merely expressed regret that malnutrition is a problem the nation has to deal with and followed it up with nothing. But with the socialist underpinnings at the centre, we can be assured that any solution would border on the ‘right to food’ bill. Now a question arises, can people by themselves be disciplined enough to work in their interest? At first pass, such emphasis on self-governance might be thought of as not workable. But if led by a proper role model who has proven himself to be a benefactor of the people and if the people have been convinced by that role model that they can achieve something by themselves too, then it could work wonders.

Another initiative that goes towards aiding this principle of self-governance is decentralization of administration, and that is happening currently under ‘Apno Taluko Vibrant Taluko’ (ATVT) scheme. Under this scheme, the talukas are themselves responsible for generating their own financial resources, manage spending, coordinate and implement various government programmes and prospects. This decentralization should also allow for elimination of red tape and harassment by middlemen.

One prominent challenge that stares Gujarat in the eye is to keep up with the current pace of development forever. It is likely that successors to Modi won’t be as able an administrator as him. We only hope that enough people have been inspired by his vision of development to carry on the pace without him and are able to spot such benevolent administrators in the future. To some extent, it is true that his vision of development has started inspiring the destitute, with recent reports coming that migrant workers from UP in Gujarat have gone home this time to vote in UP elections on the agenda of development. The success of Gujarat in packaging development to people’s doorstep should similarly continue to inspire development as an agenda in elections elsewhere. Our country is at a crossroads one again with another BOP crisis around the corner. At the same time, a new model of governance which is based on projecting development as a mass movement which needs the ‘sadbhavna’ (goodwill) of all the elements of society is emerging and we would be foolish not to accept this easily available self-organizing principle to amend the ways of functioning of our democracy. The future of governance has arrived and you the reader need to be a part of it. What are you waiting for?

Thursday, February 2, 2012

Shivaji's pluralism

The following is a letter that Shivaji wrote to Aurangzeb as published in 'Shivaji and his times' by Jadunath Sarkar protesting the levying of jaziya. Shivaji mainly argues from the standpoint of pluralism, saying that all people in the country have to be treated equally and none should be discriminated against. Other key details to note from this letter are the socio-economic conditions of Shivaji's times and the general downward trend that had begun in the Mughal Empire starting from Aurangzeb's times. There's also a bit or irony in the letter when Shivaji criticizes Aurangzeb's rule as a rule where there's a lot of looting and forts being lost, after all, he led some of the most famous campaigns among these. The letter also indicates Shivaji's view of Aurangzeb's predecessors, which is a bit disappointing for me if it is not a psy-ops. But nitpicking of that part shall be a tale for another time.

Letter begins:

"To the Emperor Alamgir -

This firm and constant well wisher Shivaji, after rendering thanks for the grace of God and the favours of the Emperor, which are clearer than the Sun, begs to inform your Majesty that, although this well wisher was led by his adverse fate to come away from your august presence without taking leave, yet he is ever ready to perform, to the fullest extent possible and proper, everything that duty as a servant and gratitude demand of him.

It has recently come to my ears that, on the ground of the war with me having exhausted your wealth and emptied your treasury, your Majesty has ordered that money under the name of jaziya should be collected from the Hindus and the imperial needs supplied with it. May it please your Majesty! That architect of the fabric of the empire, (Jalaluddin) Akbar Padishah, reigned with full power for 52 (lunar) years. He adopted the admirable policy of universal harmony in relation to all the various sects, such as Christians, Jews, Muslims, Dadu's followers, sky worshippers (falakia), malakia, materialists (ansaria), atheists (daharia), Brahmans and Jain priests. The aim of his liberal heart was to cherish and protect all the people. So, he became famous under thte title of Jagat-Guru, 'the World's spiritual guide.'

Next the Emperor Nuruddin Jahangir for 22 years spread his gracious shade on the head of the world and its dwellers, gave his heart to his friends and his hand to his work, and gained his desires. The Emperor Shah Jahan for 32 years cast his blessed shade on the head of the world and gathered the fruit of eternal life, which is only a synonym for goodness and fair fame, as the result of his happy time on earth. (A verse follows)

He who lives with a good name gains everlasting wealth,
Because after his death, the recital of his good deeds keeps his name alive.

Through the auspicious effect of this sublime disposition, wherever he [Akbar] bent the glance of his august wish, Victory and Success advanced to welcome him on the way. In his reign many kingdoms and forts were conquered. The state and power of these Emperors can be easily understood from the fact that Alamgir Padishah has failed and become distracted in the attempt to merely follow their political system. They, too had the power of levying the jaziya; but they did not give place to bigotry in their hearts, as they considered all men, high and low, created by God to be examples of the nature of diverse creeds and temperaments. Their kindness and benevolence endure on the pages of Time as their memorial, and so prayer and praise for these pure souls will dwell forever in the hearts and tongues of mankind, among both great and small. Prosperity is the fruit of one's intentions. Therefore, their wealth and good fortune continued to increase, as God's creatures reposed in the cradle of peace and safety, and their undertakings succeeded.

But in your Majesty's reign, many of the forts and provinces have gone out of your possession, and the rest will soon do so too, because there will be no slackness on my part in ruining and devastating them. Your peasants are down-trodden; the yield of every village has declined - in the place of one lakh only one thousand, and in the place of a thousand only ten are collected, and that too with difficulty. When poverty and beggary have made their homes in the palaces of the Emperor and the princes, the condition of the grandees and officers can be easily imagined. It is a reign in which the army is in a ferment, the merchants complain, the Muslims cry, the Hindus are grilled, most men lack bread at night and in the day inflame their own cheeks by slapping them (in anguish). How can the royal spirit permit you to add the hardship of the jaziya to this grievous state of things? The infamy will quickly spread from west to east and become recorded in books of history that the Emperor of Hindusthan, coveting the beggars' bowls, takes jaziya from Brahmans and Jain monks, yogis, sannyasis, bairagis, paupers, mendicants, ruined wretches, and the famine stricken, that his valour is shown by attacks on the wallets of beggars, - that he dashes down to the ground the name and honour of the Timurids!

May it please your Majesty! If you believe in the true Divine Book and Word of God (i.e. the Quran), you will find there [that God is styled] Rabb-ul-alamin, the Lord of all men, and not Rabb-ul-musalmin, the Lord of the Muhammadans only.

Verily, Islam and Hinduism are terms of contrast. They are diverse pigments used by the true Divine Painter for blending the colours and filling in the outlines [of His picture of the entire human species.] If it be a mosque, the call to prayer is chantedin remembrance of Him. If it be a temple, the bell is rung in yearning for Him only. To show bigotry for any man's creed and practices is equivalent to altering the words of the Holy Book. To draw new lines on a picture is equivalent to finding fault with the painter.

In strict justice the jaziya is not at all lawful. From the political point of view it can be allowable only if a beautiful woman wearing gold ornaments can pass from one province to another without fear or molestation. But in these days even the cities are being plundered, what shall I say of the open country? Apart from its injustice, this imposition of the jaziya is an innovation in India and inexpedient.

If you imagine piety to consist in oppressing the people and terrorizing the Hindus, you ought first to levy the jaziya from Rana Raj Singh, who is the head of the Hindus. Then it will not be so very difficult to collect it from me, as I am at your service. But to oppress ants and flies is far from displaying valour and spirit.

I wonder at the strange fidelity of your officers that they neglect to tell you of the true state of things, but cover a blazing fire with straw! May the sun of your royalty continue to shine above the horizon of greatness!"

Letter ends.

Thursday, January 12, 2012

The education India needs

This is on occasion of Swami Vivekananda's anniversary. Linked here is a letter Swami Vivekananda wrote to Shrimati Sarala Ghoshal, editor of the Bharati, Darjeeling on the 24th of April, 1897. I will attempt to paraphrase the points I find interesting.

Most (perhaps all) things about education from the letter still apply. For instance, I doubt if India has made any seminal progress in making its people think independently. Intrinsic feudal attitudes that Swami Vivekanand observes that might have set in from the Islamic age were the first such attempt that stunted India's spirit of independent thought. In the British age, Macaulayite education was the culprit and this can be observed in today's rote learning that goes on in schools and even colleges. In the feudal age, this might not have mattered much because the royals would have thought for the people. But in a democracy, where public discourse is paramount, trust in the self is important. 

As per Swamiji, this lack of self trust could be because of monopolization of education in the hands of the few, which was the tone of the time Swami Vivekananda wrote the letter in and persists in this day due to left liberals. The latter is evident when you consider the poor portrayal of rich Indian cultural tapestry, and distorted adoptions of Indian ideologies such as secularism, 'vasudhaiva kutumbkam', socialist spending etc which just serve leftist propaganda. As per him, education has to be spread among the masses, and I must add here that it has to reflect the entire spectrum of thought from left to the right, and allow the masses to choose what pleases them which is in vogue with what they need for the moment. 

The next point Swamiji raises about is lack of originality. In my view, this will follow from independent thought and decentralization of education. Another feature that is needed for originality is devotion (Shraddha) to work, which Swamiji considers next. This is absent in today's Indian education as it is based on more of vocational training. While that is absolutely necessary, there is a need of education that inspires intrinsic love and duty for the vocation, which should not be a matter of merely performing an act for money, but something for which a man takes extra pains and performs in his vocation considering it a mission of his life. Swamiji suggests that the solution to all of the problems affecting India's education is self realization as advocated by Vedanta, and then expresses a desire that the editor spread this knowledge to the world.